‘Make an effort to build a relationship with your consumer beyond the product,’ says YS Guleria, Vice-President, Sales and Marketing, Honda Motorcycle & Scooter India Pvt. Ltd., as he talks about the brand entering the mass segment with a new launch and new brand strategy
Q] The year 2012 has been an eventful year for Brand Honda after the split from the Hero group , what is the brand’s current positioning with its new launch?
This is a very significant year for Brand Honda in India because this is the year we are embarking as the only Honda in India. We are the only ones who inherit the wingmark globally known for Honda two-wheelers, and the only ones who manufacture Honda two-wheelers in India. At the same time, with the launch of Dream Yuga, we are entering a very big and competitive segment of two-wheelers in India; as almost 50% of two-wheelers in India are in the 100-110cc category. Dream Yuga is our first mass segment production motorcycle, it is very important for the overall plans of Honda and to connect with the masses as well.
Q] Can you share with us the insights that led to this launch?
When we studied the segment and met consumers during the development of the model, we found that the basic needs of the segment remained the same – i.e., mileage and cost of ownership. In addition to this, there are aspirational consumers who want a decent style and yet a little more on power if possible; this includes Tier II and Tier III towns. The development of Dream Yuga was a challenge for us and we are proud to say that we have achieved this challenge in terms of performance and mileage, keeping up 72 km per litre and 8.5 BHP as power. Keeping in mind the comfort factor as well, the wheel base is longer, with the smallest turning steering radius in the segment. This is the DNA of Honda - we have been able to give the customer what he wants.
Q] Has Honda revamped its marketing strategy? Can you share with us the current strategy?
The markets are different in terms of the way we reach out to them. As we are expecting Dream Yuga to generate good volumes from Tier II and Tier III towns, we need to work on both front end and back end. So we are working on what we call the 3C strategy at Honda. The first C is communication; we have to communicate in such a way that we are understood by customers belonging to Tier II and Tier III towns. We want to translate our global slogan ‘Power of Dreams’ into a language that is followed by the masses in India - ‘Sach kar denge sapne’ is being used in local languages as per the region. The second C is Connect; we have seen that that the Indian buyer has a very good balance of emotional and rational connect. He evaluates the product on looks and price, as well as emotional connect through messages and communication of the brand. That’s why we have roped in Akshay Kumar. We feel that he has very wide acceptability amongst the masses. We are also increasing our own network - from 1500 touchpoints last year, we want to take it to 2000 by the end of this fiscal year. The product is a mass segment product and it should be available closer to the masses. We are also increasing the reach of our regional offices; every state level will have a zonal office, so our own team is closer to the customers and dealers and have first hand information and response.
The third C is Creation – we are creating products with an aim. They become a benchmark in the segment; we will keep giving innovative technology to customers, which is what they expect from Honda.
Q] How does the tagline ‘Sach kar denge sapne’ connect to the brand?
The message this tagline gives is that, we are a country where a billion people carry a dream in their heart. The TVC shows that we are all rushing to fulfil our dreams, though we are short of time. In the same way, we at Honda also want to fulfil our dreams; our 2020 vision is to be a leader in India, we want to expand our brand presence in India which is a huge challenge, but we are a company driven by dreams. That is reflected in our campaign.
Q] From your experience, please share with us some changing consumer trends.
Vibrant vitality is the hallmark of new India. We now have a much younger demographic. This means that the duration of ownership of two-wheelers has come down over the years. About 10-15 years ago, my father and grandfather thought they would pass down their vehicles from one generation to another and took care of them accordingly. Today’s consumer looks at the latest available product and wants to change it in two-three years. So the ownership period has come down and the aspirational value has gone high. Typical factors for Indian consumers still remain price, mileage and maintenance.
Q] How does brand Honda market to such a target group?
We have been working very closely with our vendors through our purchase department to bring down cost, without affecting quality. Our own sister organization HIRD, that is the Honda research centre, is shifting base to our new factory. This will help us cut costs and time of introduction for our new products. Customers want products in a short time-frame. Our challenge is to give it to them, and having the HIRD at our factory will greatly help.
Q] The premium segment is fast growing in India. What are the plans to tap this segment?
As far as Honda is concerned, even last year we had a gap between demand and supply for our Unicorn Range. This year with increased production, we have been able to increase our supplies. In the April- May period, our growth was 150% though the segment is almost at the same level. Month on month there has been no growth, but we have grown in the segment and are confident that we will continue to grow.
Q] What is current marketshare enjoyed by the brand? What is the target marketshare?
This year, we are at 18% marketshare. Last year, we were at 14%. For us, the target is units in volume; so we aim to sell 2.75 million units in this fiscal year.
Q] Many automobile companies have said that the recent hike in fuel prices will have an adverse impact on their marketing budget. Is it true of Honda too?
I agree with automobile company comments on this. For us, it is not going to have an immediate impact; two-wheelers are a basic commuting need.
Q] Does the hike in fuel prices then work to your advantage?
In the short term, we cannot say it works to our advantage. Hypothetically speaking, if I have a 150 cc and if I am looking to upgrade my vehicle and buy an automobile, I may defer my decision. It is not having a negative or positive impact on the two-wheeler segment. But the consumer continues to run a two-wheeler for longer, on a lighter note just a little more service revenue to my dealers!
Q] What are the upcoming plans and targets ?
Our target is 2.75 million in FY 2012-13; we are also going to have a focused approach on the new launch Dream Yuga. We aim to sell three lakh units of Dream Yuga in 2012- 2013. It is a very important model for us as we are entering the segment and connecting to the masses.
Q] Have you increased the marketing budget, post-split with the Hero Group? If yes, then by what percentage?
I would not relate it to the split. As I said, 2012 is a very important year with a new launch for us, maybe from a media perspective. We are being very aggressive.